INFRASTRUCTURE

Airborne

Airport cities are fast becoming a trend also in South Africa. In line with the National Development Plan, these infrastructure projects are showing to be an invaluable investment in the local economies in which they operate.

Among the few already in motion, the Dube Tradeport and Ekurhuleni Aerotroplis projects are glowing examples with huge potential for investment and economic growth opportunities.

As President Jacob Zuma stated as early as 2012 at the launch of the Dube Tradeport in KwaZulu-Natal, “The Dube Trade Port Corporation, a state owned enterprise, has been assigned to deliver a unique airport city north of Durban, stretching from Umhlanga to Ballito. In doing so, we will be able to boost economic development and job creation and take forward our campaign against poverty, unemployment and inequality.

“[It] also demonstrates how carefully designed infrastructure can stimulate economic growth and development. Already, the construction phase has generated close to 20 000 jobs in each of the past two years. Looking forward, this project has the potential to support much more employment as it links our producers to markets around the world.”

Earlier in May, Ekurhuleni Mayor Mondli Gungubele met with delegates in China at the annual World Airport Cities Conference and Exhibition and wooed potential investors. According to the Ekurhuleni Metro, the Ekurhuleni Aerotropolis programme is an overarching flagship programme which encapsulates other flagships such as the Digital City, Integrated Rapid Public Transport Network, Beautification of Lakes and Dams, Urban Regeneration, Development of Township Economies and the Revitalisation of the Manufacturing Sector among others, to drive the radical economic development and transformation agenda of Ekurhuleni.

“We realise that these interventions may not have the envisaged impact if they are not coupled with a systematic programme to crowd-in strategic investment into the city. We are therefore putting a consented effort towards the redistribution of the wealth of the city as envisaged in section 217 of the Constitution of South Africa.

“We are going to China to tell the world that Ekurhuleni has adopted a posture that is welcoming to strategic partnerships and private sector investments. We want the world to know that we are the preferred destination for investment in the Southern hemisphere,” explains Gungubele.

Investments

There is no doubt that the Aerotropolis concept is now mainstreamed in the city and has ignited a new wave of investments in and around the airport catchment area, he explains. “It should be noted that the implementation of the Aerotropolis programme in Ekurhuleni intends to balance the distribution of economic activity between the nine affluent areas and the 17 townships of Ekurhuleni. This will be achieved through a systematic spatial and economic programme to enable the geographic spread. This way, our people will enjoy its benefits and improved quality of life from wherever they are without moving closer to the airport.”

The Metro further says that having leveraged the best global expertise in the development of the Aerotropolis programme in Ekurhuleni, the five-year Strategic Implementation Plan has identified 10 economic clusters that will be prioritized for development in Ekurhuleni.

Addressing delegates at the official Ekurhuleni 2015 State of the City Adress, Mayor Gungubele explained how the project will strengthen local economic growth through investment. “In September 2013 we announced the appointment of a consortium that had won the contract to develop a 30-year Ekurhuleni Aerotropolis Master Plan. There is no doubt that the Aerotropolis concept is now mainstreamed in the city and has ignited a new wave of investments in and around the airport catchment area.

“Having leveraged the best global expertise in the development of the Aerotropolis programme in Ekurhuleni, the five-year Strategic Implementation Plan has identified 10 economic clusters that will be prioritized for development in Ekurhuleni,” he says.

More good news Gungubele shares is that the first wave of catalytic projects have been induced in the catchment areas of the Aerotropolis, namely:

A R300 million PRASA Nerve Centre building next Kaalfontein station in Kempton Park as part of the R4 billion tender station upgrade programme by PRASA;

The Air Traffic and Navigation Services (SOC) is developing its head office and training academy in Isando, Kempton Park;

The Peermont Group’s R320 million extension of their Emperors Palace Casino and Resort, to mention but a few.

Gungubele says they have also recorded several interesting developments in and around the Aerotropolis catchment area, wherein the following projects have been planned and developed to date:

The Riverfields development in Kempton Park – which is a mixed-use development strategically located on the portion of farm Witfontein 15-IR northeast of the existing Kempton Park CBD and the Albertina Sisulu Freeway (R21) situated between OR Tambo International Airport and Tshwane;

The Gleneagle Office Park in Kempton Park which is currently being serviced and is practically sold out; and

Plumbago Business and Logistics Parks in Kempton Park, which is fully serviced and in the process of being developed. John Deere and Blue Sky Logistics have already taken occupation.

New jobs

He says that to date approximately R789 million has been invested in a number of projects along Albertina Sisulu Corridor creating at least 1506 jobs. As a result, the R21 expressway now feature iconic buildings that house companies such as John Deere, DB Schenker, DBZ Eng, DHL Global Warehouse, DHL Global Head Office, Wurth, Jonson’s Workwear, TAL Warehouse, Fast Freight, DHL Supply Chain, Takealot and many more. It is envisaged that the Riverfields Retail Mall in Kempton Park shall be established on the south-western intersection of the R21 and R25.

“This is a mixed-use and integrated development which includes residential, business, commercial, industrial, retail and other ancillary uses such as parks, recreational facilities, hotels, a hospital, schools and more. Another mega project along the (R21) Albertina Sisulu corridor is the M-T Development mixed-use development which involves 21 industrial parks, medium density residential dwelling units, mixed land-use (business, retail, showrooms, residential), offices, warehousing and distribution and educational facilities. This project is estimated at R50 billion over 15 years. Furthermore, 18 new mixed development projects ranging from industrial, commercial and residential are planned for the Pomona area,” Gungubele says.

In additional to the identification of over 107 investment projects across Ekurhuleni through a process of strategic prioritisation, the metro has identified 21 catalytic and eight strategic projects for implementation and investment over the next five years. “I am happy to announce that since November last year Council has approved a 40% Rebate Facility on Bulk Contributions for Roads, which was a major stumbling block for strategic developments and investments into the city. This is but one intervention as we continue to package a bouquet of incentives to attract more investment,” he says.

As Gungubele points out, the city recently hosted the third edition of the Air Cargo Africa Conference and Expo, which was attended by global, regional and domestic stakeholders. The main purpose was to understand the role we can play in air cargo and determine opportunities for the city and her people. It is reported that by 2014 South Africa handled almost 360 000 tons of air freight, wherein 90% of that volume was handled through the OR Tambo International Airport.

It is further projected that Air Cargo traffic that is handled through the OR Tambo International Airport will reach 550 000 by 2025, thus placing the airport as a key role-player in the regional logistics and air cargo activities. According to Gungubele, these increased air linkages between OR Tambo Airport and the African continent is critical in fostering inward investment growth. “This then means a major accelerator of growth for the Ekurhuleni Aerotropolis shall be the increase in the volume of foreign direct investment as South Africa, and OR Tambo in particular, continues to be generally viewed as the gateway to Africa and the world,” he says.

Manufacturing

In terms of revitalising the manufacturing sector in Ekurhuleni, Gungubele explains that Ekurhuleni and its sister cities within the GCR contribute just under 34% of the entire GDP of the country, and an estimated 40.6% of South Africa's manufacturing is generated in the province. “The Ekurhuleni Aerotropolis Master Plan identifies a range of opportunities to accelerate upstream and downstream economic activities that rely on Just-In-Time (JIT) Airport Connectivity. Each of the target industries has a function within the Ekurhuleni Aerotropolis and varying levels of interaction and reliance on the connectivity of the airport.

“Over and above this, target industries that are integral to the growth of the South African economy form an important aspect of the success of the Ekurhuleni Aerotropolis. In this regard, the Ekurhuleni Aerotropolis Master Plan is a wide-ranging Economic Development Strategy. To date, the Ekurhuleni Investment Centre has registered and facilitated over 12 large-scale projects that are valued at billions of rands, and have the potential to create approximately 287 200 jobs over the next 15 years,” he concludes.